Jobless numbers get squeezed in political rhetoric

When the U.S. jobless rate dipped in September from 8.1 percent to 7.8 percent, opponents of President Barack Obama decided the books had been cooked.

"In a move that is simply beneath the dignity of the Oval Office," declared conservativetalk-show host Sean Hannity, "it appears that the Obama administration altered, for political gain, the monthly jobs report."

The fact that economists on the left and right dismissed that notion made no matter. Obama's critics said the fix was in.

"When you look at the hard data," said Hannity, "there is no way to explain how the rate decreased from 8.1 percent to 7.8 percent."

Actually there is, but we'll get to that in a minute.

As Florida and the nation look to goose a sluggish labor market, few pieces of economic data are as scrutinized — and misunderstood — as the monthly jobs report.

Calculated by the Bureau of Labor Statistics, the unemployment rate is the measure that grabs headlines and resonates most with Floridians worried about economic security. In the hands of politicians, it is an effective cudgel, used to batter opponents.

The rate is produced each month by government economists working under tight security.

The Washington Post reported this year that in the week before the release, there are daily confidentiality agreements, computer encryptions and a work space that is off limits to anyone who doesn't have clearance. When BLS staffers step out to use the bathroom, they lock their data in a safe.

The agency relies on two surveys to produce its report — and this is often where confusion begins.

One survey samples about 65,000 households, asking people about their job status. Data from the household survey are used to calculate the unemployment rate: the percentage of people who are out of a job and looking for work. That last part is crucial: You're not considered unemployed if you're not searching for a job.

The second survey focuses on 140,000 businesses, asking them about total jobs, earnings and hours worked. From this, BLS estimates the number of jobs added each month.

The government reported 114,000 new jobs, a modest increase. But the household survey found the number of people who said they were working jumped by 800,000. That's what pushed the jobless rate down and prompted accusations of tampering.

Economists say it's not unusual for the two surveys to produce different numbers because they measure different things. For example, the self-employed don't show up in the survey of businesses, but they are counted as working in the household survey. And respondents are counted as employed in the household survey even if they've worked just an hour during the survey period.

The monthly numbers are a first pass, and they're often revised. September's job creation, originally set at 114,000, was revised to 148,000. August's figures were revised to 192,000, up from 142,000.

Mark Vitner, a senior economist for Wells Fargo, said he thinks the September report overstated the strength of the labor market. But he has little time for conspiracies.

"I am absolutely certain," he said, "that the unemployment-rate numbers were not tampered with in any way."

Even so, some conservatives have suspected as much for years.

They have pushed the idea that Obama changed the way unemployment was calculated to artificially lower the jobless rate. Economists say that charge is untrue.

The most common myth? That only people receiving jobless benefits are counted as unemployed. This one is so widespread, BLS debunks it on its website.

BLS points out that many laid-off workers aren't eligible for unemployment or they exhaust their benefits before finding a job. So "clearly," the site says, "UI [unemployment insurance] information cannot be used as a source for complete information on the number of unemployed."

Critics have also claimed the administration hides the "real unemployment rate."

That's what they call a broader government measure that captures not only those deemed unemployed but also workers forced into part-time jobs and people who would like to work but have stopped looking. The so-called under-employment rate — called the "U-6" rate by bureaucrats — runs about seven points higher than the narrowly defined jobless rate.

Economists say the U-6 measure does offer a deeper look into the problems of a weak labor market. But they reject claims that the Obama administration has kept it from view. It's released every month, alongside the jobless rate.

The strict unemployment rate gets more attention — and always has — because it's easier to understand.

Rollins College economist Bill Seyfried said Republicans have seized on the U-6 rate because it is more damaging to Obama. Democrats have focused on the pure unemployment rate because it makes the president look better.

"Both sides of the political aisle," said Seyfried, "point to the numbers that make their case."

And some partisans try to have it both ways.

Last year, the conservative Americans for Limited Government called Obama's stimulus effort a "catastrophic failure," noting a jobless rate of 9.1 percent. The headline on the group's press release was: "Nation Stuck in a Ditch, Unemployment Numbers Show."

Two months later, unemployment had fallen to 8.6 percent. So how did ALG respond? With this headline: "Unemployment Rate No Longer Valid Economic Indicator."